Jimmy E. McElroy & Associates
Dedicated to Helping People in Financial Distress
Call Today for a Free Initial Consultation TN: 901-881-8730 TF: 888-871-3678

Memphis Tennessee Bankruptcy Blog

Will Chapter 7 discharge your recent credit card debt?

One of the reasons you may be considering filing Chapter 7 bankruptcy in Tennessee is that you believe Chapter 7 discharges your credit card debt. But is this always true?

An article in Bloomberg News reported that the court may not discharge your recent credit card debt. Why? Because a little known provision of the Bankruptcy Code, Section 523(a)(2)(C)(I) to be precise, sets forth a presumption against discharging whatever credit card debts you take on within 90 days of filing bankruptcy if that debt represents the purchase of $675 or more of consumer goods.

Can bankruptcy discharge all debt?

As a resident of Tennessee, you have several options available if you decide to file for bankruptcy. Chapter 13 and Chapter 7 are the two most commonly talked about. However, before you file for bankruptcy, you should understand that not every debt you hold may be considered dischargeable.

FindLaw shows what typically happens after you file for Chapter 7 bankruptcy. The outcome largely depends on what debts you may be trying to rid yourself of. Chapter 7 bankruptcy allows you to discharge unsecured debt, which is a big help to a large number of people because things like credit card debt fall into this category.

Is credit counseling worth it?

When you file bankruptcy in Tennessee, the court may well require you to go to credit counseling. Actually, Need Help Paying Bills recommends that you obtain the services of a credit counselor prior to filling bankruptcy so as to possibly avoid it.

Whether before or during bankruptcy, the National Bankruptcy Research Center and the Management International Financial Education Foundation state that the results of their joint study show that credit counseling can make it possible for you to overcome your debt problems while improving your credit report.

How to recognize debt settlement scams

When your finances start to spiral out of control, it can leave you feeling desperate. Some for-profit companies may prey on that desperation in an attempt to get you to sign on and utilize their services. Unfortunately, though, many debt settlement companies operate in an unethical manner, and they may be more about building their profits than helping you dig your way out of debt.

Just how does the debt settlement process work? In most cases, a debt settlement agency will tell you that it will negotiate with your creditors so that you have to pay only a small fraction of what you owe. There are numerous problems that can arise when you agree to work with a debt settlement agency, though, so it may serve you well to think twice before signing on with one. Also, you would be smart to be extremely wary of any company that makes what could potentially be false promises about eliminating or greatly reducing your debts. Why? In most cases, your creditors have no obligations to go along with any settlement terms such a company proposes. So, how can you identify a potential debt settlement scam so you can steer clear of it?

Are women vulnerable to financial troubles after a divorce?

Getting a divorce is difficult enough without experiencing money problems on top of it. Unfortunately for many residents of Tennessee and elsewhere, financial peril is common after a divorce. As you may already know, this can be especially true for women.

Forbes explains that in a survey conducted by Worthy, 46% of women claimed their divorces came with unexpected financial complications. Many women were caught unprepared after their divorce because their husbands controlled the finances during the marriage. However, some or all of the following reasons for post-divorce financial struggles may pertain to you:

  • Not realizing you would have to return to the workforce, if you stayed home to care for the children
  • Underestimating the cost of health insurance
  • Not being aware of how much marital debt you have, including the mortgage, auto loans, student debt and credit cards
  • Believing you would receive more in alimony or child support, or that the payments would last longer
  • Not knowing how much a divorce would cost

How will bankruptcy affect your credit score?

If you are one of the many people in Tennessee who are struggling to keep up with overwhelming debt payments, you likely have begun thinking about filing bankruptcy so as to get most of your debts discharged and consequently give yourself a fresh financial start. While bankruptcy can certainly accomplish these goals, you likely also worry about how it will impact your credit score and credit report.

No doubt exists but that your credit report and your credit score relate to each other. But while your credit report will reflect your Chapter 7 bankruptcy for 10 years or your Chapter 13 bankruptcy for at least seven years, you can raise your credit score considerably sooner than that. Credit.com reports that unfortunately, going through bankruptcy can drop your credit score by as much as 200 points. It will almost certainly lower your credit score by 130-150 points. For most people, this means that if their credit score was 680 before bankruptcy, it will take nearly five years before they can achieve that credit score again.

Should I feel ashamed for filing for bankruptcy?

You may have been putting off speaking to someone about filing for bankruptcy, despite dealing with extremely high financial stress. If so, you are like many other Tennessee residents who are being held back by a pervasive stigma of personal bankruptcy. It may put some of your worries to rest learning that this stigma is largely unnecessary. When a business files for bankruptcy, people see it as a way for the company to restructure its debts and come up with a more effective business plan. Why should it not be the same for individuals?

Fox Business explains that the stigma against personal bankruptcy is encouraged by some credit counseling services, financial advisors and banks that warn people filing for bankruptcy should be a last resort and that it can permanently destroy your chances of getting lines of credit again. These claims are simply not true. In fact, the Federal Reserve Bank of New York states that after a personal bankruptcy, people tend to have access to better lines of credit than those who continue to struggle under their debt.

Tips to positively recover from bankruptcy

After a bankruptcy in Tennessee, a person may have mixed emotions. While it feels good to be out of debt and not get frequent and harassing calls from creditors, it may be overwhelming to think about what comes next.

There are numerous reasons people file bankruptcy. For some, a major and unexpected expense, such as medical bills from an accident, causes the need for bankruptcy. For others, however, bankruptcy occurred due to irresponsible spending habits. Now is the time to make changes in spending and begin to rebuild credit again. The following tips can help get people back on their feet faster.

Will you become the next gray bankruptcy statistic?

If you are a Tennessee senior facing serious financial difficulties, you are not alone. If you have begun to think about bankruptcy as your only real option, again, you are not alone. In fact, you are part of a new nationwide phenomenon: gray bankruptcy.

The New York Times reports that gray bankruptcy, i.e., bankruptcies filed by people age 65 and older, are on the rise in America. While only 2.1% of 1991 bankruptcies represented your demographic, that number has now risen to 12.2%.

3 secrets debt-relief companies do not want you to know

When struggling with debt, it is smart to look for a solution. But it is necessary to be cautious about debt-relief companies. Working with a debt-settlement company can leave you in an even worse situation than before. 

The only reason debt-relief companies seem attractive is that they are not upfront about the risks and problems with the services they provide. Here are the secrets they hope you never find out. 

*We are a debt relief agency.
We help people file for bankruptcy relief under the Bankruptcy Code.